News
The Summer VAT Cut – What Hospitality Businesses Need to Know
08 Jun 2026
On 21 May, Rachel Reeves announced a temporary reduction in VAT for certain hospitality and leisure supplies over the summer. From 25 June to 1 September 2026, a 5% VAT rate applies to specific transactions, but the detail matters, because this doesn’t apply across the board.
Here’s what’s in and what’s out.
Children’s meals
The 5% rate applies to children’s meals served on the premises, but only where the meal is specifically advertised as a children’s meal (i.e. on a children’s menu). It doesn’t apply to smaller portions, lower-calorie options, discounted adult meals, or anything shared between adults and children. Takeaway food also remains standard rated.
Where a children’s meal deal is sold as a single price package, say, a main and a drink, the whole thing qualifies. Non-alcoholic drinks on the children’s menu are included, even if charged separately. Drinks ordered from the adult menu are not.
Children’s tickets for cinema, theatre and exhibitions
Individually priced children’s tickets for cinema screenings, theatre performances, shows, concerts and exhibitions qualify for 5%. If your venue only sells a standard admission ticket at a single price with no children’s pricing, all tickets remain standard rated.
Family tickets that include at least one child qualify for the reduced rate on the full ticket price. Adult-only group tickets do not.
Attractions, open to all ages
This is the broadest category. The reduced rate applies to admission charges for all customers (not just children) at qualifying attractions, including theme parks, water parks, zoos, aquariums, museums, heritage sites, nature reserves, botanical gardens, circuses, adventure parks, soft play centres, indoor bounce parks and observation attractions such as viewing platforms and wheels.
The 5% rate covers entry only. Food, drinks, merchandise and any separately supplied goods retain their original VAT liability. Sports activities, whether spectating or participating, are excluded entirely.
Timing and prepayments
The reduced rate applies to supplies where admission falls between 25 June and 1 September 2026. If a ticket is purchased during this window but covers entry on or after 2 September, the standard rate applies.
For advance payments already received, including those taken before the announcement, businesses can opt to apply the lower rate under HMRC’s change of rate provisions. Where VAT has already been accounted for at the standard rate, adjustments will be needed, and HMRC’s expectation is that customers who prepaid should be refunded the difference. You’d need to demonstrate to HMRC that the refund has been made.
Getting your systems ready
With 25 June coming up quickly, now is the time to check that your till systems, booking platforms and automated ticketing can apply the correct rate, and that they switch back again on 2 September. Pricing decisions also need to be made: pass the saving on to customers or hold prices and improve margins. Either is legitimate, but whichever you choose, your menus, website and booking processes all need to say the same thing.
If you’d like help working through how this applies to your business, speak to your usual WR Partners contact.
